Regulatory stakes: Constitutional implications of India’s real money gaming ban

The Indian gaming industry has undergone a dramatic transition in the recent past. What was once touted as one of the fastest growing sectors in India has now faced a legislative roadblock. The government of India has recently passed The Promotion and Regulation of Online Gaming Act, 2025 (“Act”) which imposes a ban on online money games (and envisages a framework for offering e-sports and online social games). This piece analyzes the potential legal challenges to the recently introduced legislation.

Being a federal country, there is clear demarcation of Central as well as State legislative authorities in India. As per the State list (under the Constitution), the States have the power to legislate on aspects of ‘sports’ as well as ‘gambling and betting’. It is with this authority that some States had framed their own legislations either to ban gambling or to regulate the same.

The Centre, on the other hand, regulated online gaming intermediaries by introducing amendments (in 2023) to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (although ‘gaming’ doesn’t feature in the Union List or the State List). While all the provisions of the IT Rules, 2021, weren’t in force (primarily owing to non-appointment of a regulatory body), the sector continued to flourish with the presumption that there is de facto permissibility of such online real money gaming platforms (by observing some minimal legal compliances).

However, in August 2025, the government in a stark departure to its earlier stance (of regulating online real money gaming platforms), passed the Act which effectively brought down the curtains on all online real money gaming platforms. With the Act being already challenged before three High Courts in India, the future of the ban (and generally the online gaming sector) hangs in an indeterminate state.

The Indian government has asserted that the promulgation of the Act is necessary on grounds of public health, by citing rising user addiction and instances of financial fraud in India as mounting concerns calling for “urgent intervention” (and prompting the RMG ban).

However, the Act’s sudden promulgation has been met with various concerns regarding its validity. At the outset, the legislative competence of the Union government to regulate online gaming has long remained a contentious matter due to the inclusion of “sports” and “betting and gambling” activities (including games of chance) under the State List of the Indian Constitution (which grants state-legislatures exclusive law-making powers concerning subject matter thereof). Given such demarcation (and since “gaming” activities haven’t clearly been assigned under any Constitutional List), stakeholders assert that the enactment of the recent ban comprises a potential overstep of powers.

Meanwhile, the ban’s enactment is also asserted to comprise potential trespass of fundamental rights. Since games of skill (even when involving stakes) have received recognition as a legitimate business activity, it is contended that the RMG ban infringes upon the fundamental right to trade and profession enshrined under Article 19(1)(g) of the Constitution. In connection, the blanket nature of the ban (which lumps together games of skill and chance despite their established differences) is stated to be disproportionate and arbitrary in nature, thereby infringing the fundamental right to equality under Article 14 as well as the principle of reasonable restriction under Article 19(6). Further, it is contended that imposition of sweeping prohibition on RMG operations, specifically the conduct of relative promotions/advertising, impedes the fundamental right to freedom of speech under Article (19(1)(a).

The above contentions have notably culminated in legal challenge against the Act, which has been filed by the RMG operator A23 before the High Court of Karnataka. In its petition, A23 argues against the indiscriminate criminalization of games of skill (such as its own rummy operations) and posits that this comprises a violation of (aforementioned) fundamental rights. The outcome of A23’s petition (which was preliminarily heard by the Court on August 30, 2025) remains to be seen. While the High Court refused to stay the operation of the Act in the preliminary hearing (as was prayed-for), it has directed the Union government to file response and complete submissions (on the interim application for stay) by the next date of hearing (i.e. September 8, 2025).

Operationalizing the RMG ban in India, in practice, remains fraught with potential challenges. While major RMG operators such as Dream11 and Gameskraft have announced their intent not to oppose the Act, challenges can be anticipated from other RMG platforms (operating games of skill) in the wake of the petition filed by A23 (before the Karnataka High Court) as well as by Bagheera Carrom (before the Delhi High Court). Further, per widespread media reports, relevant State legislatures – including Karnataka (which has drafted laws to regulate skill-gaming) may also initiate legal challenges against the Act alleging that Union government lacks the authority to promulgate the same.

However, since the Constitution empowers the government to legislate on various forms of “communication” as well as any subject-matter not enumerated under other Constitutional List (such as online gaming) – it can be said that the ban on online gaming (or atleast any ancillary advertising) falls squarely within the ambit of the government's powers. However, the question which remains to be answered is whether the government can assume law making power for all online real money games (which includes games of skill and games of chance) or is it the case that the Central government has encroached upon the State government’s power to legislate on the subject of gambling.

Meanwhile, implementing the ban on offshore operators (providing RMG services to Indian users) is subject to additional difficulties. Interestingly, the government hasn’t yet blocked access to many foreign RMG platforms, which now seek to pitch themselves as alternatives to Indian RMGs. While this constitutes a violation of the Act, penalizing foreign offenders thereunder remains a complex issue.

The Act marks a major shift in the gaming regime in India – given its effective and immediate overhaul of well-settled jurisprudence as well as legal protection of games of skill. Through this legislation, the Union government seeks to establish uniform (nation-wide) regime for gaming, which addresses mounting public health/ safety issues. Even while banning RMG operations, is worth noting that government strikes a balancing act by introducing a statutory regime for licensing and promotion of “E-Sports” and “Social Games” (thereby incentivizing proliferation of such games).

However, sudden introduction of the RMG ban has spurred various concerns regarding legislative competence of the government as well as its indiscriminate nature– which must be dealt with at the outset. For this purpose, further clarity and re-calibration regarding balance of powers between the Union and State governments is eminently necessary, even while prioritizing public interest.

Notwithstanding the above, while introduction of the Act may give rise to regulatory uncertainty in the short run – it could entail significant long-term opportunities for the e-ports and social gaming industry in India.

About the authors: Gaurav Bhalla is a Partner and Ashneet Hanspal is a Senior Associate at Ahlawat & Associates.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

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